It was 2015. I had just started a role at a start-up, excited to finally be in a place where I could make a big impact. I had been hired by a VP I admired, and we were building a product that could genuinely improve people’s lives. Six months in, my boss changed and the whole situation felt different. Like I mentioned in my previous post, I realized what I was actually chasing wasn’t a bigger title or a better team — it was freedom. Freedom to do what I loved and live a fuller, richer life, without being dependent on a paycheck from the corporate world.
In my spare time — during my commute, after the kids went to bed — my focus turned to financial independence (FI). Here’s some of what I learned along the way, and how it shaped the strategy my husband and I still use today.
Rule One of FI: Spend Less Than You Make
This sounds obvious, doesn’t it? The more you save, the faster you reach FIRE (Financial Independence, Retire Early). Yet a surprising number of people don’t actually do this. I read an article noting that more than 50% of Americans spend more than they earn, while many in the FIRE community reach financial independence by saving 75% of their income.
We weren’t willing to go that far — we still wanted to travel and enjoy life — but we consistently saved about 50% of our net income. Most of that came not from trimming our everyday paycheck spending, but from directing bonuses and RSUs almost entirely into savings and investments. In 2015 alone, with both of us working well-paying jobs, we grew our investment portfolio’s value by 15%, even after pulling out a chunk for a house down payment.
The Strategies That Got Us Here
Over the years, I kept learning and refining our approach. Here are the core strategies we used, and still use, to build toward financial independence.
1. Max Out Tax-Free Investment Options First
My husband and I have maxed out our 401(k)s since day one, and we still do. It just makes financial sense to capture every tax-free dollar available. Why? First, it grows tax-deferred. Second, in many cases your employer matches a portion of it — that’s free money.
I know the common objection: “But I can’t touch that money until I’m 59.5.” After digging deeper, I learned there are legitimate ways to access 401(k) and IRA funds before that age without paying the 10% early withdrawal penalty. There are also strategies for moving funds from a 401(k) to a Roth IRA with minimal tax impact, depending on your tax bracket. In short, retirement accounts are far more flexible than most people assume — through a Backdoor Roth, you may even access IRA funds with little to no tax owed. I’ll cover the specifics of this in a future post.
2. Always Keep a 6-12 Month Emergency Fund in Liquid Cash
This became critical for us. Two months after buying a house, my husband was laid off. Instead of panicking, he saw it as an opportunity to pivot toward his real passion: art. Because we’d already cut unnecessary costs, we covered our expenses on my income alone. Then, three months later, I was laid off too, when the start-up downsized 50% to extend its runway.
Over a six-month stretch, our household went from two incomes to zero, and then back to one as I transitioned into a bigger role at a tech company. It was genuinely scary, but our emergency fund meant we never had to make a desperate financial decision. That cushion is what turned a layoff into a launchpad rather than a crisis.
3. Make Your Money Work for You, Even While You Sleep
Robert Kiyosaki’s Rich Dad Poor Dad introduced me to the idea of four types of people, and it reframed how I thought about work and wealth entirely.
The Employee
Values job security and health benefits above risk. This was us right after our MBAs, when we were still building a financial base.
The Self-Employed
Prioritizes freedom and independence. This is me today, with a financial cushion that lets me pursue what I love: animals, my kids’ school, travel, and helping others reach FI.
The Business Owner & Investor
Wants money working around the clock. By 2008 I realized good income alone wouldn’t get us to retirement by 60 — the stock market would need to do the heavy lifting.
I started by picking individual stocks intermittently, whenever I had time. Eventually I automated investments into low-cost, broad-based index funds. A 2016 Morningstar study found that actively managed funds generally underperform passive ones, especially over longer time horizons, and often get merged or closed. My MBA finance professor said it plainly: you can’t beat the market. I found the same message in JL Collins’ Simple Path to Wealth stock series, and settled on Vanguard’s Total Stock Market Index fund, VTI.
I’ll admit, I didn’t stick to pure dollar-cost averaging perfectly. I liked buying the dips and holding tech names like Amazon, Netflix, Apple, and Tesla. That approach worked well overall, though the market’s tumble from October to December 2018 tested my nerves. I held on, and the market recovered.
4. Streamline Your Investments
I had scattered holdings across individual stocks — Amazon, Google, Procter & Gamble, and more. When we needed to liquidate assets to buy a house in 2015, I used it as a chance to simplify, selling off consumer giants like P&G, Starbucks, Johnson & Johnson, and 3M, and consolidating into index funds. I’ve made mistakes along the way, but I keep coming back to the same principle: simple, passive, and consistent beats clever and complicated.
This Is Just the Beginning
These four strategies gave us the foundation to move from the daily grind toward real freedom. In Part 2, I’ll dig into the specifics of early retirement account access, home-buying trade-offs, and more.
Source: bestmoneymoves.com, “What Percentage of Americans Spend More Than They Earn?” (2018)